Monday, February 24, 2014

George Frederick Handel

On this date in 1684 the great composer George Frederick Handel was born. In addition to celebrating his music, we should also recognize that he did so while facing the challenges of the entrepreneur. Those who have read this blog for a long time might remember a post I wrote over two years ago:

While browsing through Newman Flower's biography of Handel the other day, I came across a passage explaining why his opera Deborah
failed and was surprised to see that much of the blame due to
entrepreneurial error. In addition to other factors such as the lack of
assistance from Court patronage (due to the public's being dissatisfied
with its perceived preoccupation with all things German), Handel decided
to significantly increase his ticket prices. He was led to do so
because of his successes in the immediate past.

Raising prices was a mistake, because as the law of demand implies, many
fewer buyers patronized his performances because they refused to pay
the higher prices. And he did so at the worst possible time.

As Flower relates the story:

The greatest mistake of all was made by Handel himself. He increased the
prices of admission all round. The boxes were a guinea: sets in the
gallery half a guinea, so that only 120 people paid for admission to the
first performance; the others forced themselves in.

Handel could not have made a greater blunder, for increased prices were
at that time the principal topic of conversation. Sir Robert Walpole was
floundering in a morass of the national excises, and, to save the
Government from bankruptcy, he had revived the salt tax the year before,
and now was about to impose a tax on tobacco, and two shillings on
spirits and wine. The people were flaming. The muddle had been brought
about by Walpole's reduction of a shilling off the land tax, which
benefited, of course, the moneyed classes. Therefore he was not taxing
the multitude to release those who had money enough to sp;are for
taxation purposes. National hatred against Walpole surged up once; there
should be, the mob declared, no taxation of the commodities of life.
For Handel to put up his prices on top of the commotion, meant adding
fuel to fire. They could not do without salt, tobacco, or wine, but they
could do without Handel. Such was the import of the outcry.